Thousands vent fury over Israeli budget

The 10,000-strong march against the budget in Tel Aviv last weekend (Photo: Flash 90)

Nearly two years after hundreds of thousands of middle-class Israelis joined social justice protests against the government, the new state budget prompted further demonstrations last weekend.

Ten thousand people took part in the Saturday-night demonstration in central Tel Aviv, with smaller protests in other cities.

The protesters, who were joined by opposition MKs from Labour, Meretz and Hadash, called on the new Finance Minister, Yair Lapid, to revise the budget which he presented to the Knesset last week.

The budget, which is being passed nearly five months late due to the elections, has been roundly criticised in the media for placing most of the burden of cutting the deficit on the middle class while leaving corporation taxes and the wages of workers belonging to powerful unions largely untouched.

All levels of income tax have seen a rise of 1.5 per cent and VAT has been put up by one per cent. Workers with academic degrees will lose part of their tax exemptions, housewives will have to make national security payments, pensions will be taxed and child benefits cut.

In a press conference last Thursday, Mr Lapid said: “I would have preferred to give out sweets but we all understand the deficit must be closed. Everyone wants someone else to close the deficit.” He denied the budget came mainly at the expense of the middle class, saying: “For the first time, the working person is not the only one hurting. We raised corporate taxes and duties on luxury goods, and cut ministers’ and MKs’ salaries. This budget cuts sectors which were untouchable in the past.”

So far, Prime Minister Benjamin Netanyahu has backed Mr Lapid’s budget but, in an attempt to assuage public anger, he will probably attempt to reduce some of the tax-hikes and cuts.

One change to the budget has already been made — on Monday ministers decided to reduce by a quarter the planned cut of NIS 4 billion (£730 million) to the defence budget.